Custom Software Integrations Can Make or Break Your SaaS business
Do you remember the Mad Men episode when they decided to buy a computer for their advertising agency which replaced the lunch room?
There was a time when big companies paid millions of dollars to buy giant computers to advance their business. Having a computer was a differentiator for them not just because computers were powerful, but because not every business could afford it.
And then the personal computer revolution started by companies like Apple which changed the business world forever. The revolution that democratized the computer hardware industry made the computers affordable. After, small businesses could use the benefits of computers. Computers were no longer a differentiator.
A similar trend happened for the software industry. Once upon a time, you needed to pay a lot of money to a company to build a fully customized solution for your business. It would take them years to build the solution and months to train your staff on how to use it. The software was expensive, rigid and the process was time consuming: not a very good combination for small businesses. Software became a differentiator for businesses just like the giant computers- until the Software as a Service(SaaS) revolution started.
Now you can buy software from much smaller companies or have a low-cost app development done. Each company specializes in a specific aspect of your business and their product is priced at a fraction of the cost of traditional software. They democratized the software industry and brought the much needed flexibility and affordability for the small-business owners. (We covered the power of flexibility in a blog post before.) There was only one BIG problem:
Now your data is located in multiple separate systems, just like multiple islands in an ocean.
Let’s focus on defining the problem first:
The consumer’s needs related to their data can be divided into two main groups:
1. Being able to view (report, export, etc) the data in one view, with related data points connected to each other correctly.
2. Not having to enter data manually more than once.
For example I might have a payroll system with information about my employees and their salaries, and also a calendar system in which they can enter requests for leave. I want to see when each employee took their leave last year and if they took less or more than the allotted vacation days. Simply I want the two systems to be integrated. Also, when an employee enters the request for leave into the calendar manually the payroll system should be aware of that without the need of manual update.
For SaaS products to be considered as an alternative to traditional software systems, they have to address these two needs. You need to integrate your product to systems that your potential customers use most often and you need to have integration points for other products that want to integrate to your product.
One common mistake SaaS businesses make is that they want to be the last point in the data flow. They want to be a sink but not a source. That doesn’t work very well, for two reasons:
1. SaaS products will not make money from page views. They make money by providing a very specialized service to the customers.
2. There are so many providers in any area of specialization that if you don’t provide your customer with the flexibility, they will consider choosing a competitor. Nobody wants to be limited.
Which systems should my product integrate with?
Depending on your product it might be easy to find the first few systems that you need to integrate with. For example if your product has anything to do with your customer’s website, you should probably consider integrating nicely with WordPress. (WordPress dominates the CMS scene. Read more here). Or, if you are dealing with money, Paypal is one of the main systems you need to consider as part of your integration strategy. Always look at the market share of logical integration systems. Start with the one that has the highest market share.
You might say that there are thousands of systems I can integrate with and I will never be able to create integration with all of them. Lucky for SaaS products there is another way to handle many integrations to your product: Using integration based services such as Zapier or IFTTT or many others similar to them. Using their services you create one integration with their systems and through that they provide you with other integrations to use. It’s a win-win situation for SaaS.
The reason SaaS revolution started was to bring affordability and flexibility to customers.
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